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Barrick Gold Corp. did not rule out the possible sale of its Lumwana copper mine in Zambia amid talks with the government for a “win-win solution” to the tax concerns surrounding the mine.
While Barrick denied media reports that it had sold Lumwana, the company said Jan. 21 that it is considering all options for the mine, which would be in a challenging situation if Zambia pushes through with its plan to launch new mining duties and increase royalties in a bid to reduce debt.
The country’s plans include raising the country’s sliding scale for royalties of 4% to 6% by 1.5 percentage points and the introduction of a new 10% tax when the price of copper exceeds US$7,500 per tonne. A 15% export duty on precious metals, including gold and gemstones, will also be imposed, while copper and cobalt concentrate imports will incur a new 5% levy.
The proposal would imperil Lumwana’s operations, which has contributed more than US$3.3 billion to the Zambian economy over the past 10 years, according to Willem Jacobs, Barrick’s COO for Africa and the Middle East.
Jacobs said the company has made detailed proposals to improve the government’s share in the economics of Lumwana.